ANALYSIS: Upfront All Quiet–So Far
Economy leaving both sides patient and reserved for now
By Claire Atkinson -- Broadcasting & Cable, 3/23/2009 2:00:00 AM
TV advertising executives used to complain that the May upfront inched earlier every year. This go-round, however, everyone—from the analysts who try to predict the market to the clients that have to determine their budgets for September 2009 and beyond—has been quietly holding their cards and waiting for the clouds to lift. Cable upfront presentations, which in past years have begun as early as January, are now bunched into March, April and even May.
The typical upfront posturing seems remarkably low-key. “People are afraid to posture because things are so uncertain,” says one senior cable industry figure. “The bravado of the game of the past doesn't seem appropriate anymore.” TV sales-side executives are keeping the bullish comments to a minimum, concerned they might look out of step with the market.
With little clarity on the general economy post-May, negotiations are likely to drag on into the summer. “I hope it happens later,” says one major TV ad executive. “The later [it does], the better the chance of the economy looking OK. But just because business is happening later doesn't mean it's disastrous.” This person predicted that second-quarter scatter would look much the same as first-quarter scatter.
The ad market, at least for some, doesn't appear to be getting worse. “In our portfolio of companies, we've seen that it's tough out there—that's no surprise—but for the last month or so it hasn't gotten worse,” says Richard Bressler, managing partner with private equity firm Thomas H. Lee Partners, which counts Nielsen Media Research, Clear Channel and Spanish-language broadcast network Univision among its stable of properties. “That doesn't mean it isn't still bad, and it's still down year-on-year. It appears to have stabilized, but it could be a false bottom.”
Viacom chief executive Philippe Dauman is characteristically opaque when discussing specifics about the scatter market and the likely upfront dynamic, but is also optimistic. As he puts it: “We're already cutting some very attractive deals in the kids upfront.”
To be sure, not all TV companies are faring equally in the recession. Nielsen Media Research’s statistics on ad spending in media in 2008 outlines just how accelerated cable ad growth has become, thanks to ratings improvement and the political dollars spent on news networks in 2008. Nielsen reports that 60% of all media ad dollars, or around $82 billion, were spent on TV, including network TV, cable, Hispanic and spot TV.
Total media ad spending was down some $3.7 billion last year, to $136.8 billion. Hispanic cable TV channels saw the largest growth in the total media pie, up 9.6%, while cable TV was up 7.8%. Broadcast network TV was down 3.5% for the year.
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